Definitions (reporting financial institutions)

This is an overview of a long definitions rule; the bare Rules carry the full conditions.

Financial account (clause 1). An account, other than an excluded account, maintained by a financial institution, including a depository account, a custodial account, and — for an investment entity — any equity or debt interest in the institution; and any cash value insurance contract or annuity contract (other than a non-investment-linked, non-transferable immediate life annuity issued to an individual that monetises a pension or disability benefit under an excluded account). The rule defines depository account (including, for accounts other than U.S. reportable accounts, accounts holding specified electronic money products or central bank digital currencies), custodial account, equity interest, insurance contract, annuity contract, cash value insurance contract and cash value.

Excluded accounts. The rule lists those that are not reportable, including certain regulated tax-favoured retirement and pension accounts and savings vehicles subject to contribution limits, accounts under the Senior Citizens Savings Scheme Rules, 2004, certain term life insurance contracts, estate accounts, accounts connected with court orders or with the sale, exchange or lease of property, tax-or-insurance escrow obligations, certain capital-foundation accounts, credit card overpayment accounts subject to limits, and electronic money product accounts with low rolling balances.

Financial asset. Includes a security, partnership interest, commodity, swap, insurance or annuity contract, or any interest in them, but not a non-debt direct interest in immovable property; for accounts other than U.S. reportable accounts it also includes a relevant crypto-asset.

Financial institution (clause 3). A custodial institution (holding financial assets for others as a substantial part of its business, with income from that at or above 20% of gross income over the relevant period), a depository institution, an investment entity (primarily doing investment, trading or portfolio management for customers, or with gross income primarily from investing and managed by another financial institution; "primarily" meaning at least 50% of gross income) and a specified insurance company.

Other defined terms. A "non-participating financial institution" by reference to the FATCA agreement between India and the United States, and a "non-reporting financial institution" — including governmental entities, international organisations, central banks, certain retirement and pension funds, gratuity and provident funds, qualified credit card issuers, exempt collective investment vehicles and qualified non-profit entities — with sub-definitions of governmental entity, integral part and controlled entity.